Rumors that Apple plans to release a more compact version of the iPhone refuse to fade, with new claims out of the Far East suggesting the device is slated to appear sometime this spring.

The Chinese-language Economic Daily News, a fairly reliable publication with presumed sources within Apple's Taiwanese supply chain and manufacturing facilities, said Tuesday that bidding for some of the device's potential component suppliers is near an end.

In particular, the paper reported that Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC) will likely land chip orders for the low-cost entry-level handset, which it refers to as the "iPhone nano."

The paper added that the unspecified chip orders may see the nod from Apple in March ahead of an official iPhone nano launch that would come no earlier than June.

Apple has used its annual Worldwide Developers Conference in June to finalize details of both the original iPhone and the iPhone 3G, though the original model was first previewed during the Macworld trade show in January of 2007.

Financial experts have long argued that Apple's strong real-world revenues and high iPhone gross margins afford the company substantial headroom to introduce a $99 handset that could lead to huge strides forward in market share.

Last month, FBR Capital Markets analyst Craig Berger said the iPhone nano would serve as that device and include a baseband controller from Qualcomm rather than Apple's traditional supplier, Infineon.

"Our contacts see a lower-cost version of the iPhone, possibly in mid [second quarter]," he said. "Some call this device the 'iPhone Nano'; whatever one calls it, we believe this device is on its way."

Adding a new twist to the rumors on Monday was a report from American Technology Research analyst Brian Marshal, who suggest that the much rumored nano phone would bypass the US markets to serve only those abroad, particularly the Far East.

Marshal based his assumption on feedback from AT&T insiders who told him that such a device had not surfaced within the wireless carrier's testing labs, which would seem to preclude a stateside launch in the near term.

"Obviously, the best-case scenario here would be a China launch, but we have no definitive knowledge of this and are working on identifying the local of launch and other pertinent details," he wrote.

Should Apple sell 10 million units of the so-called iPhone nano this year, it would generate an incremental $3.4 billion in pro forma revenue for Apple and drive a 7 to 12 percent increase in the company's per-share earnings, the analyst said.

Rumors of an iPhone nano debut at last week's Macworld Expo swirled leading up to the conference after two iPhone case makers (1, 2) added references to the unannounced device to their websites.

One of the numerous iPhone nano mockups submitted to AppleInsider.

However, the anecdotal evidence, along with supposed renderings of an actual protective holder, was met with considerable skepticism given that corroborative evidence of such a device had not surfaced from more traditionally reliable sources.

Meanwhile, grey marketers in Thailand aren't waiting for the official word from Cupertino and have instead begun marketing their own iPhone nano lookalike handsets under the iPhone mini moniker.

With rumors of an "iPhone nano" persisting, AppleInsider has gone ahead and created an iPhone nano topics page (RSS) to archive the growing number of reports on the device. As is the case with all topics pages, readers interested in a specific topic can subscribe to that topic's RSS feed.

If Apple does make an iPhone Nano (and thus also probably an iPod Touch Nano), they had better not dicker with the hardware specs beyond the the iPhone, iPhone 3G, Touch Gen-1, and Touch Gen-2. Too many hardware specs can spell doom for the App store. We're already seeing Apps running better on Gen-2 Touches than the other models.

What would they take away from the iPhone to make it a "nano?" A smaller screen size?

1) Data plan. There would only be voice service.
2) Custom apps. There would be bare-bones apps only, similar to a regular iPod.

There are plenty of people, like myself, who would rather carry one device ("iPhone Nano") instead of two (iPod and regular cell phone). The data plan for the iPhone in Canada is exorbitant ($70-$80/month, 3 year contract). Many want a single device that will sync up with iTunes, AddressBook and iCal and allow them to make phone calls. Also, Apple could charge a premium over other "dumbphones", because it's an Apple product. This also allows them to do an end-run around AT&T by breaking exclusivity.

A nano with a smaller screen, but the same res AND with the same flash capacity (8GB or more) would be HOT in any country. The iPhone is too big even for my big hands. The 3G's rounded back is easier to hold, but the width is still tough to grasp.

A nano-sized iPhone would be cool, but the screen would be suitable for only the young and the eagle-eyed. The keyboard would be even harder to use for those of us with large fingertips.

Anything Apple sells overseas people will want in the USA. Period. It's Apple. People are crazy about anything they do and want to buy everything they make (except the iPod HiFi ).

What would they take away from the iPhone to make it a "nano?" A smaller screen size?

A significantly smaller screen size would be a problem. I mean it could be 3.4" or 3.3", but not much smaller than that. If you look at the interface design guidelines you can see that current software for the phone uses, in various places, exactly the minimum space for "buttons" according to the guidelines.

There are other ways to lower the cost of the phone that would not require software changes. Less memory (back to 4GB), smaller battery, no GPS, no 3G, all plastic finish. There also are other ways to cheapen it which I think would be a bad idea: no WiFi, for example.

The whole point of the iPhone is the screen. I would be surprised to see a significantly smaller screen.

1) Data plan. There would only be voice service.
2) Custom apps. There would be bare-bones apps only, similar to a regular iPod.

#1: quite possible. I've been fine with wifi-only on my touch and could seriously think about a voice-only + wifi phone.
#2: No way. Apps have become the biggest differentiator (after integration/ease of use). Apple has no benefit in going to 'phone only'.

Maybe smaller bezel... screen right to the edges, on/off button on side?

But overall, I'm not sure I see the current form-factor as all that big.

The idea that such a new device could break with AT&T is interesting tho'.

If Apple does make an iPhone Nano (and thus also probably an iPod Touch Nano), they had better not dicker with the hardware specs beyond the the iPhone, iPhone 3G, Touch Gen-1, and Touch Gen-2. Too many hardware specs can spell doom for the App store. We're already seeing Apps running better on Gen-2 Touches than the other models.

If there is an iPhone Nano, why would there be an iPod touch Nano? Doesn't make sense. An iPhone Nano will not be usable in the same sense as a regular iPhone / Touch. I bet it will have very limited functionality phone, iPod, games (not the same ones as its bigger brother and sister) and a much smaller selection of apps, if any. All downloading of apps / games will need to happen via iTunes. I wouldn't be surprised if there is no wifi, and no web, and no email. It may not even be G3. It will just be a very small and very cool little phone / ipod with a few extras. If you want smart phone you know what to get.

Forget everything about the current iPhone and picture it as just an iPod Nano with a phone. It might not even have wifi. No touch screen. An Apple logo.

They could bring back the fatty for this. For people who mostly use their iPod for music and have simple phone needs this would be a perfect fit.

What separates it from other similar devices? It works with iTunes, which can't be overlooked. It's cheap. And most importantly, Apple will get a bounty from AT&T as they bring over more new subscribers.

(Paxman - I would have beat you to the punch but the phone rang. Weird. I almost never answer the phone.)

#1: quite possible. I've been fine with wifi-only on my touch and could seriously think about a voice-only + wifi phone.
#2: No way. Apps have become the biggest differentiator (after integration/ease of use). Apple has no benefit in going to 'phone only'.

Maybe smaller bezel... screen right to the edges, on/off button on side?

But overall, I'm not sure I see the current form-factor as all that big.

The idea that such a new device could break with AT&T is interesting tho'.

The thing is, and I know this sounds silly, but the iPhone doesn't look like a *phone* at all. This will sound sillier, but the iPhone is like an iPod touch with calling and a camera bolted on.

I would go so far as to say that the iPhone excels at the "touch" functionality, and is limited with its "phone" functionality.

The way I see it, the iPhone Nano would be less of a "touch" device and more of a "phone". For instance, I can't see Safari running on a smaller screen.

I'm not sure what Apple is thinking of doing, but I'm sure they're trying to expand beyond the limited smartphone market somehow.

Doesn't make sense to me; they need to introduce something to get the Edge iPhone stalwarts like myself to re-up in June or risk them going to a competitor's device when their contract expires. A "nano" iphone at that point would do more to add insult to injury.

The thing is, and I know this sounds silly, but the iPhone doesn't look like a *phone* at all. This will sound sillier, but the iPhone is like an iPod touch with calling and a camera bolted on.

I would go so far as to say that the iPhone excels at the "touch" functionality, and is limited with its "phone" functionality.

The way I see it, the iPhone Nano would be less of a "touch" device and more of a "phone". For instance, I can't see Safari running on a smaller screen.

I'm not sure what Apple is thinking of doing, but I'm sure they're trying to expand beyond the limited smartphone market somehow.

I don't have an iPhone but I've played around with it in the store. My phone needs are modest, but from what I've seen of the iPhone it's a step up in phone features from my Verizon phone. I can't stand the interface on it. The iPhone phone stuff looks more functional to me with features like Favorite Contacts. But is there speed dial?

I also think the iPhone would be a great phone for seniors who'd be interested in semi-advanced phone functions, like sending a photo to someone. I've shown people the photo features on their own Verizon phones over and over and they get lost every time. The iPhone is far more intuitive.

Doesn't make sense to me; they need to introduce something to get the Edge iPhone stalwarts like myself to re-up in June or risk them going to a competitor's device when their contract expires. A "nano" iphone at that point would do more to add insult to injury.

So you are assuming there is only one new product being launched and no improvements to the existing iPhone? Not very likely...

Let's not forget that the 2-year data plans are coming to an end for the original iPhone buyers. What will Apple do to keep them a happy and continuing Apple phone users? Will AT&T allow the phones to be unlocked once the 2-year contract is up?

Slightly smaller screen, tighter form factor, no data - wifi & phone only. Will run all apps and games that don't need data. Cheap - sell like hot-cakes - no brainer.

I think a smaller screen would make current iPhone apps incompatible. Why make another phone without data plan?! why not just remove the mandatory data plan instead and make it optional?!

I can't see the benefit of releasing an smaller crippled version of the iPhone right now. If price is the problem then they are better off releasing a 4GB version for $99 or lower the price of the 8GB version to $99 and offer the less expensive data plans from AT&T ($15/month) while releasing 32GB version for $299 with the 16GB for $199.

I can't see getting an iPhone without a data plan. To me, that would totally defeat the purpose of getting an iPhone. All of the features would then only be usable via wifi, which is pointless for certain things such as GPS, Google maps, push services from mobileme, etc. You might as well just get a regular phone IMO. I would guess it would be a smaller screen, and less capacity (4GB?).

I want a Verizon iPhone damn it!!!!!

I agree with sflocal...the original iPhone buyers are coming up on the end of their contract this June/July so it would be great if Apple did something nice to keep these users. I know I'm looking to replace my original iPhone. I would like to see a phone that gets a better signal (especially in buildings), and of course more capacity. Any other new features would be welcome as well. I could care less about copy and paste though...

I can't see getting an iPhone without a data plan. To me, that would totally defeat the purpose of getting an iPhone. All of the features would then only be usable via wifi, which is pointless for certain things such as GPS, Google maps, push services from mobileme, etc. You might as well just get a regular phone IMO. I would guess it would be a smaller screen, and less capacity (4GB?).

I want a Verizon iPhone damn it!!!!!

I agree with sflocal...the original iPhone buyers are coming up on the end of their contract this June/July so it would be great if Apple did something nice to keep these users. I know I'm looking to replace my original iPhone. I would like to see a phone that gets a better signal (especially in buildings), and of course more capacity. Any other new features would be welcome as well. I could care less about copy and paste though...

I really doubt this is real. Apple is not going to sacrifice the app store for a smaller phone and since when have they gone through the whole expense of researching, developing, manufacturing any hardware for one specific market (and one that isn't the US to boot)

How much can they really add hardware wise to the iphone anyway? They could slim it closer to the touch, and add a better camera/flash. that's about it.

and beyond that when has apple ever taken an expensive product and made it CHEAPER by removing features? capacity i can understand, but features? destroying the entire design platform? no. not going to happen.

. Also, Apple could charge a premium over other "dumbphones", because it's an Apple product. This also allows them to do an end-run around AT&T by breaking exclusivity.

Apple doesn't set the rates. ATT does. and will until that contract is over. And you can bet ATT is not going to allow a 'no data plan' iphone. regardless of size.

Quote:

Originally Posted by Eriamjh

A nano-sized iPhone would be cool, but the screen would be suitable for only the young and the eagle-eyed. The keyboard would be even harder to use for those of us with large fingertips.

which is why it doesn't make any sense

Quote:

Anything Apple sells overseas people will want in the USA. Period. It's Apple. People are crazy about anything they do and want to buy everything they make (except the iPod HiFi ).

double if it is cheaper. US buyers will freak if they make a $99 model, even at 80% the size, and sell it overseas only.

Quote:

Originally Posted by walshbj

Forget everything about the current iPhone and picture it as just an iPod Nano with a phone. It might not even have wifi. No touch screen. An Apple logo.

then it is not an iphone. in fact, it is possible if they take the touch etc out of the phone they would risk being sued by the companies that have the patents on a music playing cell phone.

Quote:

Originally Posted by Dorotea

And maybe it is unlocked

that won't happen in the US for certain.

Quote:

Originally Posted by aaarrrgggh

Doesn't make sense to me; they need to introduce something to get the Edge iPhone stalwarts like myself

not exactly. but there is an Edge issue. they promo'd the new phone for having 3g. it was the center of the ads etc. plus ATT is cutting back their Edge service to convert those transmitters to 3g. so a step back on that would be stupid.

Quote:

Originally Posted by sflocal

Let's not forget that the 2-year data plans are coming to an end for the original iPhone buyers. What will Apple do to keep them a happy and continuing Apple phone users? Will AT&T allow the phones to be unlocked once the 2-year contract is up?

Apple doesn't have to do anything but keep making phones that work. ATT are the ones with the issue. Apple did it's part by bringing the contracts in ,especially this past year with the sign or you can't buy rules ATT forced on them. ATT has to keep them. Dropping their rates on data and or texting wouldn't hurt but I don't see that happening. better 3g service is in the workds but probably not fast enough.

other than that there is the issue of US laws. rumor has it there is a law that says that while a device can be legally locked to a network once a buyer has completed the initial contract period, upon request, the manufacturer and/or carrier must unlock the phone and allow use wherever the owner wants. supposedly this is based on the carriers claiming that they paid for the cost of the device over the period of the contract. if the owner completes the contract he/she has paid for the device and legally can do as he/she wishes with it. but I haven't ever seen anything but rumors on this.

The iphone nano rumors seem to be true.
This is a fantastic way for apple to increase its worldwide market share in the phone business !
Here are my predictions:

It will come in the same capacities as the ipod nano( 8Gb and 16GB)

It won't support the current apps from the appstore but instead developers can develop dashcode widgets for it like mac os x dashboard (which could be compatible with the grown up iphone too)

It will be available contract free worldwide, which explains AT & T's ignorance about it.

Apple will solve the screen size issue for typing by having a landscape only keyboard.

It will have ipod and safari applications identical to the curent iphone.

They may wait until september for the ipod event, since it targets people who want an "ipod phone". They will probably price it at $249 for 8Gb and $299 for 16Gb, contact free.

It will be available in multiple colors!

How does this make them true? How about mac mini updates? Everyones been predicting those for a long time, and they're much more likely, yet nothings happened yet. not to mention, it's very very very obvious (plus i think he's said it) steve jobs hates buttons. i can't imagine him ever approving ADDING buttons to an iPhone (nano)

Quote:

Originally Posted by sflocal

Let's not forget that the 2-year data plans are coming to an end for the original iPhone buyers. What will Apple do to keep them a happy and continuing Apple phone users? Will AT&T allow the phones to be unlocked once the 2-year contract is up?

I don't think apple's ever thought about customers like that. they have their own schedule. Not to mention they're trying to get out of people's expectations driving their production cycle (hence leaving macworld) So why would they be worried about peoples original iphone contracts expiring, if they want a new iphone, they can get a 3g.

Simple. Apple will eventually phase out both the iPod Classic and the iPod Nano and go all-touch screens (except for the Shuffle). Once 64GB and 128GB Flash Memory chips are cheap enough, expect to the iPod Classic to go the way of the dodo.

If Apple puts in the R&D to make an iPhone Nano, they will also develop an "iPod Touch Nano" and phase out the iPod Nano. They did the same exact thing with the iPhone & iPod Touch Gen1, and the iPhone3G & iPod Touch Gen2.

The question is, does exclusivity apply to all Apple phones or just to the 'iPhone'?

ATT is not stupid. they likely made sure that the contract covers all cellular capable devices created by Apple. so even if Apple added a 3g modem into their laptop, that service would be tied to ATT for the contract period.

Quote:

Originally Posted by NasserAE

I think a smaller screen would make current iPhone apps incompatible. Why make another phone without data plan?! why not just remove the mandatory data plan instead and make it optional?!

because ATT makes the rules and they want it mandatory. they will tell you that they can't block data use on the phone so there has to be a data plan in place or you'd paid by use and could rack up huge bills.

also, ATT controls the price of the plan, not Apple. remember this always. if the phone were on Verizon, Verizon would control the price of service. so Apple can't offer a $15 data plan unless they want to built their own cell phone infrastructure etc. which they don't and that's why they went with an existing company as a partner. same for not wanting to run a credit card company/service which is why Juniper Bank runs it for them.

as the prices of components come down I could see them knocking $50 off the existing two sizes and perhaps adding a 32gb. but I don't see a 4gb being in the system anymore. it wasn't a big seller before the apps store and now it really wouldn't be cause you just can't hold that much on it.

Why such a narrow view of what constitutes an iPhone? This would be an iPhone NANO. Apple would not want it to cannibalize iPhone (regular) sales. People who just want a phone don't buy an iPhone. With the Nano they would get a very cool Apple Phone with an iPod. I can't see there is a problem with that - very distinctly different from the iPhone of today. Don't forget the halo effect, and EVERYBODY has a phone and just about EVERYBODY has an ipod, but only a few have iPhones.
I think we need to think cell, ipod and games, and not an awful lot more. Sound like a winner to me.

I really doubt this is real. Apple is not going to sacrifice the app store for a smaller phone and since when have they gone through the whole expense of researching, developing, manufacturing any hardware for one specific market (and one that isn't the US to boot)

How much can they really add hardware wise to the iphone anyway? They could slim it closer to the touch, and add a better camera/flash. that's about it.

and beyond that when has apple ever taken an expensive product and made it CHEAPER by removing features? capacity i can understand, but features? destroying the entire design platform? no. not going to happen.

Exactly. The 'phone' is a feature. Apple's future is in the platform/ecosystem.
In addition, the last thing they want is feature fracture where the platform starts looking like the mess that is application distribution on other platforms.
Case-in-point... I downloaded the Sound Recorder app to my first gen touch. I knew it didn't work... just wanted to get it while it was free in case I upgraded to a new touch.
But the store nevertheless allowed me to download it and had I not known what I was doing (and had it been a $$ app), I would have been quite annoyed to find that it didn't work on my particular hardware.
Backward compatability with older hardware will inevitably happen, but Apple doesn't need to make the problem worse by intentionally producing crippled hardware.
In short, my prediction is that the ability to run apps is the new baseline for new hardware. The current screen is the smallest you'll see, and shrinkage will only occur in the bezel.

ATT is not stupid. they likely made sure that the contract covers all cellular capable devices created by Apple. so even if Apple added a 3g modem into their laptop, that service would be tied to ATT for the contract period.

because ATT makes the rules and they want it mandatory. they will tell you that they can't block data use on the phone so there has to be a data plan in place or you'd paid by use and could rack up huge bills.

also, ATT controls the price of the plan, not Apple. remember this always. if the phone were on Verizon, Verizon would control the price of service. so Apple can't offer a $15 data plan unless they want to built their own cell phone infrastructure etc. which they don't and that's why they went with an existing company as a partner. same for not wanting to run a credit card company/service which is why Juniper Bank runs it for them.

as the prices of components come down I could see them knocking $50 off the existing two sizes and perhaps adding a 32gb. but I don't see a 4gb being in the system anymore. it wasn't a big seller before the apps store and now it really wouldn't be cause you just can't hold that much on it.

actually i think they only had an exclusive for the 1st gen iphone. they made a new contract for the 2nd gen (3G iphone), in which they extended 1 more year.

the next iphone, might not be exclusive, BUT i am sure ATT will ask for that with big money up front.

Forget everything about the current iPhone and picture it as just an iPod Nano with a phone. It might not even have wifi. No touch screen. An Apple logo.

They could bring back the fatty for this. For people who mostly use their iPod for music and have simple phone needs this would be a perfect fit.

What separates it from other similar devices? It works with iTunes, which can't be overlooked. It's cheap. And most importantly, Apple will get a bounty from AT&T as they bring over more new subscribers.

(Paxman - I would have beat you to the punch but the phone rang. Weird. I almost never answer the phone.)

I think this is the way to go once the current iPhone market has been saturated. Lowing the Flash capacity or not including WiFi or 3G isn't going to reduce the size or cost by enough to make it worthwhile. And making the screen smaller is just going to make the developers work harder and make mostif not allcurrent apps not look/work properly.

The real benefit of having an iPhone Nano that is simply an iPod Nano and basic cell phone is for the much greater number of people that want an iPod and a phone combined, but aren't so tied to the internet that they want or need it 24/7, and certainly don't want to pay $30/month for the capability.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"